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Over the past month, a number of states and cities have passed or proposed laws preventing transgender people from using the bathroom of the gender they identify with.

Now, the tide looks to be turning against these discriminatory policies, as governments realize that they could be subject to federal sanction.

First on Tuesday, the Dallas suburb of Rockwall's attempt to pass a bathroom bill was felled by protests.

The measure didn't even make it to a vote.

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“Every group needs protection,” city councilman David White told the Dallas Morning News.

Then on Wednesday, just one week after passing the most punitive bathroom bill in the country, the town of Oxford, Ala. voted to withdraw their ordinance punishing transgender people with up to six months in jail for using the "wrong" bathroom.

City attorney Ron Allen said the law was likely in violation of Title IX of the 1972 U.S. Education Amendments act, which prohibits discrimination on the basis of sex in education programs that receive federal funding, the Anniston Star reported. At least one council member called for the law's repeal "out of concern that the law would have 'serious ramifications' for the Oxford City Schools system," the Star said.

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Those fears do not appear to have been misplaced. Late Wednesday, the U.S. Justice Department sent a letter to North Carolina Gov. Pat McCrory warning that HB2 was indeed in violation of both Title IX and Title VII, which prohibits discrimination against public employees.

"HB2…is facially discriminatory against transgender employees on the basis of sex because it treats transgender employees…differently from similarly situated non-transgender employees," the Department wrote. "Under HB2, non-transgender state employees may access restrooms and changing facilities that are consistent with their gender identity in public buildings, while transgender state employees may not."

McCrory has until Monday to repudiate the bill before Attorney General Loretta Lynch will take him to court, the letter said.

McCrory, along with other conservative state officials, responded by accusing the White House of federal overreach, according to the Charlotte Observer.

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But it looks like the consequences are now far beyond what they could have imagined.

“The letter confirms what we’ve already known–that HB2 is deeply discriminatory, violates federal civil rights law, and needs to be repealed as soon as possible,” the Observer quoted State Rep. Chris Sgro, a Democrat who is executive director of Equality NC, as saying. “We’ve already lost $500 million in economic impact, and now we are violating federal civil rights law and risking Title IX funding.”

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Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.